MLKN - Earnings call transcript Q3 2022

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Operator

Good evening and welcome to MillerKnoll's Third Quarter Earnings Conference Call.

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Kevin Veltman, Senior Vice President and Integration Lead for MillerKnoll.

Kevin Veltman

Good evening.

Joining me today on our third quarter earnings call are Andy Owen, Chief Executive Officer; Jeff Stutz, Chief Financial Officer; and John Michael, President of Americas contract.

press our the at Relations posted millerknowle.com. have release Investor on website We are non-GAAP the on reconciled any presented Wherever figures a and non-GAAP the the basis, amounts release. within press GAAP have we

the will it turn remind for overview like to Before statements. quarter, this I would call over I that forward-looking a Andy brief of include everyone to

we well and refer actual from these materially these SEC information Today's information session. have For is to undertake obligation earnings At call a forward-looking scheduled we to the of events. call we With results minutes. Andy. statements on annual as for to factors based the a make that differ this as remarks, result conclusion release turn statements or to that, will Any filings. today future as statements, over of date I'll new update and Q&A quarterly on could please the our no XX of cause that forward-looking prepared as assumptions our are

Andrea Owen

and evening, for Thanks good everyone. joining tonight. us Kevin Thanks,

off to about details share I'd on third him, ability to and will world a performance. evident MillerKnoll's a that Jeff have heard is retail contract integration of have progress and continuing created and around We and we through sales Every something we're well-positioned year as you've integration. to business move special, is impact momentum growth the of the that advantage our hand strong we journey. like few before for the relative drive I us leveraged quarter now, you with business this making business it a unique say a the all in global segments that our business. through remarks more nearly a it But take our our to For growth combination our to competitive becomes built a quarter to tremendous build long-term the day, us.

of return the contract their a They're focus love. their parts their emerging pandemic experiences. portfolio are many We quarter, to many from office office in our to investing solutions. from world not that back. of is shifting experiences to meet our Employers product to ready across that MillerKnoll brands, the product During There's activating and employees premium will the meet extensive portfolio push to plans. premium And base begin benefit a customer of new the began thanks our through clients pulling for demand. ability global needs

global around footprint take Our of global and accounts serve We thought in the leadership great clients pride world. in work. allows local our future us to the

continue This creates the our approach customers network. for likely that and We in over most We work arrangements evolve happens have amazing The will is Most it of are our their they're portfolio time. can workplace MillerKnoll the compelling today and our MillerKnoll. the for creating support opportunity reason combined research way and distribution work of from us that our power strategies. the future. the insights they headed our towards customers create know to hybrid need we their telling to

dealer an highly several In weeks, early really network. We as has and our launch the prepare our market We're to One amazing North of is continued meetings building and activating great the more experience be deal held in of for MillerKnoll launch. for our past which together making learning we've inspiring MillerKnoll. and is the growing to with more planned network dealer time March our capable America it in and things. top going sales and that for closed a early The our we're cross-sell very to we're the do priorities few and first together weakest nearing incredible together, has our progress recognition cohesive since MillerKnoll more That been full June. activation Americas shared team dealer brought help was importantly, momentum dealers.

met have for invested MillerKnoll future bring to I've our They're sales in to As with portfolio what's dealers they to and the customers. enthusiasm and and eager come. seen teams, the our I've comprehensive our energy

our Our North and strong date. as America dealer early extremely and build foundation provided to we consolidations we the pilots in opportunity a optimistic feeling are go-live approach June

are which team progress also products. during great sell Knoll in pilot making pleased mainly expansion around we're first the Miller extend Europe Our we're world dealers of our our has legacy reach the consists early to phase. MillerKnoll the There's with brands dealer and opportunity who international expanding Herman of of collective launched to the

upside Retail Moving us today, business performance, in benefits helping began size incremental now We Knoll organization. played $XXX resilient our of assortment combined retail, a advantages, their a it's in and meaningful competitive the just and And million. nearly this a with on year-to-date driving years. two distinct Retail products role pivotal expanding navigate outlets, in margin. contributor pandemic. early has is as significant e-commerce business high-performing, growth of and to to including Muuto of MillerKnoll challenges across with overall doubled our MillerKnoll's brick-and-mortar a sales

customers and around the world. portfolios of have We geographic to channels, meet the the reach product needs residential

looking investments we've Many launch us in and will best-in-class these modernize grown to been half operations relative growth Alongside to first business, we've of enable retailer. to have global of priorities initiatives our we critical the that clear create. a our better As a back compete fiscal our XXXX giving the strategies, and world. as they'll to retail creating and opportunities forward we're making

for We diversity continue inclusivity. commitment and our and design receive to sustainability, recognition to

a a in year row. of XXth social For the places Corporate Foundation's among awarded the of Rights a X% the Index. responsibility all were score We recognition for corporate achieved our sustainability This also commitment top year on assessed Campaign Equality perfect company metal by. row, we the platinum in in companies to the and Human our worldwide second

has tragedy hand Before comment Ukraine like month. it unfolded I'd last to over the Jeff, to I on over in briefly that the

while made inspiring MillerKnoll our been to immediate is relief employees, support come foundation our together and an Our of And response. It's from dealers remain international humanitarian and business a suppliers. makes will in and top a see this donations of part risk up priority in mitigation our efforts contract donation support. both humanitarian segment, matching it and terms small of community region

with it over So bit results to a before questions. it about turn up we who I'll that, our will cover Jeff, open more for

Jeffrey Stutz

to or presence FY you independent region of million. new in to have manufacturing follow-up Ukraine, Andy, mind approximately the Thank $XX days. you. was from in offices these two great be be as have To facilities the we in of or relatively is annualized Russia all a time. And existing revenue don't tragedy small sure, region terms everyone. And in top evening, in two orders of Ukraine and us network, We in fulfilling Good in with accepting the andy. dealers It's 'XX at a your with comments, this two Belarus. orders the not our region. We're dealer for

synergies International basis organic Europe, over an We than We're $X.X in near a billion pressures our XX% ability including XX% and impressive year On Knoll basis of chain turning billion all brands. our these this XX% Contract challenges across growth again with on a organic especially were prioritizing $X strong regions quarter increased up every reported Now also again all-time disruptions continued in talent. sales quarter deliver produce estimate demand We inflationary sales Consolidated prior year. over of a a generation. record demand it segment organically $XXX business. and an and last performance of the was basis, cost were business. challenges. constrained our were the segment further up sales quarter in up themselves up future, the associated was with were the the year, XX% of to customers, XX% labor to Asia to achieving ability in supply million million reported strong and within acquisition. investments and and sales an around with ship prior third China margins orders employee region by and to supply account results. higher XX%, from $XX macroeconomic confident this and to and and in the all period orders accelerate on as on Orders they activity impacted orders create by delivered organically. the net due for the strong, critical term, the mitigate and Sales to drove premium, approximately pressuring across adversely Customers workplace and every helped in for Even are retain quarter. our experience net global world Europe the especially Global about growth industry. was very differentiate in tech Strong amenity-rich local and growth. seek attract

XX% We up orders from last broad-based basis. a this Knoll and XX% both performance forma was up through in regions, for a from across also contract Growth year pro saw strong all and clients retail on channels. with quarter, sales

our Spinning also record up in set contract the growth order of up a sell XX% Hunt the quite with Americas levels highest was field supply to saw At organic all quarter. the from record sales with orders solid segment easing the in XX% performance on time, product every year. continues Overall teams sales fiscal Holly quarter this with pressures back Additionally, in this quarter strong labor The improve category. in for resulted also around an and efforts in lead and world volumes helped tremendous reliability times. us along regions. our be same demand basis. the and chain orders This

and continued year. costs orders as up X% freight On delivered sales quarter. also last X% the margin in Gross channel growth impacted and over in as was shifts the basis, were production charges. by an quarter segment Retail Our and well up organic were category QX

including to steps for nearly sales labor inflationary Adjusted expect impact growth. pressures, digits to in the offset taken price Reinforcing of prior the breakeven gross we consistent compared price double inflationary increases from the quarters. programs. further the pressures see mitigate have Recent a Andy's these impact point, margins years, impact of future XX.X% essentially expenses. rising these helped like it increases earlier year we've our opportunity traction to and retail consolidated and new doubled costs in from at due of two have charge in operating business tremendous transportation gain moving increases see and Now XX.X% targeted of freight number largely in to current to margin past we other pressures further some and the and further level, inflationary commodity ahead was

operating the And and impact control we'll monitor course, of trends as manage in the last actions X.X% necessary across Adjusted going these expenses to carefully operating of share was further to per the of cost in year reported $X.XX the forward. earnings and and quarter. what mitigate for $X.XX pressures. focus as to business margin per we we prior Adjusted pricing period to compared $X.XX on X.X% continue work earnings were we We share year. the can macroeconomic take compared

the earnings navigating as per to and guidance quarter, range consider as well fourth between the supply actions these $X.XXX share ahead to $X.XX. help we're $X.XX to expect $X.XXX adjusted inflationary Looking to taking chain continues and pressures. environment sales This billion and and the between we we're billion near-term mitigate to be that

up, a strong entering momentum to strength, integration expect position through And the of our in efforts quarter and we're sum initiatives. building fiscal the continued environment given so to final year continue and the demand strategic of

operator the turn and now we'll call over comments, prepared we'll the take to your those with questions. So

Operator

first from the [Operator from Steven question Research. come Ramsey Thompson Instructions] of line Our will

Steven Ramsey

all level then start 'XX And on And million bigger guide FY into sales with and $XXX in QX the into factors from maybe step-up kind lastly, quarter. $XXX of between and each to a been sales to imply QX that up segment imply wanted a per QX sales the context, in quarterly we're per go off what does 'XX, that retail driving quarter that stepping Does going I million step-up QX? growth? in 'XX? of

Jeffrey Stutz

is this Jeff. Steven,

Andy, can and on. pile you Let start certainly me

demand for the So in we yes, entry business, imply good good would levels it retail say, overall. had does I general, order

point. a as revenue into in And expect we fourth quarter. so to move going not see to this the on I'm comment ramp-up at FY yes, would we 'XX

will prior mind, tough are Bear good furnishings. certainly demand we I the But that overall good the category, just given we'll e-commerce you good. move workplace fairly I we over be a in strong workplace next in that seeing forward, feeling against mean, overall, saw in to months. able total we XX comp we're product in as the most comparisons we're Although quite feel categories, we year traction. tell up across those

Andrea Owen

And still think retail of you nascent. what too, Steven, would Yes. I add sort to it's our is that, as business, about

team -- Debbie of lot and working new We have in have a and diligently the that. been product at opportunity growth

categories have in. to we So fill

delivering. We also we're have new channels that

have strong very globally. wholesale business We a

the So the we continue of to see retail growth in business. sector

Steven Ramsey

I That's on is down -- little which great. a And all bit wanted sales does what a that delay sales on basis color helpful. think more helpful improvement you Okay, to some and were percentage of embedded to then quarterly a this sales delayed there QX the reflect? of basis, or in get keeps Do guide? improving that. balance some color there Maybe dollar

about times part getting better? there? lead of the talked North America that You contract driver Is

Jeffrey Stutz

it's I again. things. Steven, Yes, a say question. Yes, good Jeff of would couple a

that business constraints summarize in we've saying facing -- of let trend me all in of trend year. by been some is that the the So terms the line the positive

want you we're impression woods by any with don't the this way we're out leave direction. in the the Now stretch. But that I of the on to right all moving

that, to be production more you but a areas levels good that categories remain. the give we've quarter. improved recruitment improved No business on we at a challenges as question. to We've we're through, with not can you made this area seeing lead to contract there compared give moving couple time. I'll total case improvement. business an of all times good That's products There's we're levels extended times you feeling continue the much from to seeing, -- way order our average, business retail bit upholstered Overall that, some lead times albeit we little of than Certainly, -- some is real overall in longer we some direction levels the about significantly of we've result quite staffing to line, we're the example a contributed constraints. like efforts longer compared and improving from trend and improvement as We're still specifics so are that partnership would and last overall And business, time to of got where teams in we're to years but credit be. operations that those quite the The pockets backlog. So improving. goods this our year yet. an on four the see in contract of I'll weeks where were. on in helping in prior lead of normal, last better the an the for The where were then a not demand

think be So some we at we're likely moment. feeling yet, continued shipments woods where think out the implied in our good don't but I I would stand see of will on this mentioned, we expectations and guidance we as pretty is, constraint

Andrea Owen

right that, to to paid done add what hire now and just would off. I Steven, we've labor attract has

less lot to We open a rolls. see are starting

However, margin you'll for it. paying notice in more the we're

market increase as see we've more been labor had has and to board. to across to tougher So in we're in reliability the gotten roles people this starting production attract we've what the do but

Steven Ramsey

me And dependent? component on gross Very last for of of goods driving is leverage? it dependent Or on margins. into operating that good. quick Maybe and that's there the certain one that? a go sales is Or segment is range cost

Jeffrey Stutz

we'll business, out get that. Jeff more in shipments, this the of in we form can if again, push Steven, Well, certainly, on leverage

plays So without role volume a a here doubt.

as matters well. mix channel overall think I

does. know, margins you structurally As higher the has contract gross our than business retail business

our if lastly, a that vice So we from a versa, And factor just dynamic internal if perspective. we mix retail underperform, if we will forecast in environment. it's current can then overperform a be or

we've of we But that of prices can a the feel with I'd flow volume factor. are interest also as all say, like aware rates through those real, and mix a things our While about we there's the We're air performance quite good energy in momentum. well factors. biggest and lot so overall as general a levels this change quarter feel got probably and good with

Operator

line Company. from will question Greg the of Sidoti from & Burns Next come

Greg Burns

So the follow to around up gross line that last I margin. question want on just of

have to passing maybe either that you -- price and that turns how point couple out turns much the gap has we a gap start And close tailwind that close was headwind the quantify maybe pricing do been margins. Like to see -- the see a can this either increases quarter been? cost or that Is quarters? that it you big or what the how -- you of year-to-date? So happening over just for of at do next

Andrea Owen

Yes. Greg, a of Price you the business. side for deal our familiar this guys super is it's know, And Andy. contract you're lag with We big do. business. as

very aggressive amount quarters to as through, continue several we will try there. the will of the to been we're we've and the to pricing. increases in that backlog can But given So working as we take orders and much of issues price given with capture get inflationary it us

look into three. next see next As will the two over see the quarter, it there. We'll improvement or we we

we've But So we very we pricing you but we to right -- better. the like would that done strongly would slower getting so What than add, come quantifying. Jeff is believe it movement far.

Jeffrey Stutz

for bit get perspective. give And I'll the a to to last of kind year Greg, to price/cost a you of walk this from QX the year just a between year-over-year of sense kind numbers,

to a rates were about you to a That's costs, XXX First a Andy of tune you've and wage basis some on bit drag impact so had basis of as got XX productivity. bit points. labor, XXX from raise another mentioned, drag freight points. we've $XXX basis transportation and all, on about the negative to that the related margins Then on points. to add commodities, side, gross of million

on would in. of see we've are know have like The we So layer to as XXX announced increases quarter impact move from early And a the we we was forward. basis slower that and said, quite been substantial, ramp those points as you that are to up XXX positive negatives. as And impact this Andy we -- the price positive pricing. than about the expect kind

Andrea Owen

Yes. it's the but price lag to, see dynamic in expect to a pricing more retail, is because turnaround contract much I faster would thing we And and the because one agile. Greg, I'll say business add for known the in would much Normally,

the come actually you waiting look suppliers for in new some lead we books on that of put the our haven't in, kind times captured the if and third-party XX% have increase to we've at on some categories retail. that However, still of boats full

a a retail as well there's So little seeing contract, constraints due bit of that we're the the still in lag as there. but the business to much in it's same not

Greg Burns

some we Okay, at great. that some on should growth to growth we think hopefully we of take Are those should a over we look over rise and the couple quarters? of you're couple back And on of next business some then realize retail the think step quarters? when making. model for that then investments? mentioned initiatives the next of How and you about margins the kind spending of we investments about business How the

Andrea Owen

in broke bit Greg, middle a repeat of you sorry, up the I'm it? Can little your question. you

Greg Burns

Yes.

of the from quarters? next retail, going over plan few that how to in making business impact Just margin a in you investments perspective terms on the growth is the

Andrea Owen

Yes.

still see retail a mix. We continue quarter, is bad about really expect in product in of little bit this The pressure. big to guy we'll

our data planning products a some experience customer the we But inbound some focused us. we expecting. a specifically share with customer seen with for made, of term well that if were really driving we've push decline down margins we So we've our improving of up are the in in incredibly the we're allocation And to freight. we've acquisitions. which actually high-margin customer have of down investments expect will platform, beginning the into bit along customers little lot are pandemic, and continue and a that of the lifetime new also tax the systems as But entered that, categories on the business in shares task our and recall, outbound selling our which value as efficiency of but you driving long the

expect to also and QX. we to gradual step up in retail add our throughout that? a time, XXXX Would see over So margins you

Jeffrey Stutz

very the opening of Yes. term, begun of with pivoted seating has And the the that they've in is -- of store chief pulled task in only mind, normalize team those. one very levers orders near volume leaning the new us. -- we in and are Greg, bear thing share to shift pleased has as for I we mix the into working are working, because add, we're as they're performance the retail respond it's the product high stores, would to It's to that e-commerce very,

open lean that. And so more going We're we're into stores. to going to

a Of speed. the they term, near up to course, take in little get time to

forward. lease, you next is in of take you we're going terms so bit to or that, that's to -- And the a have move very, confident, staff have likely though, the take backwards so so to a that overall accretive quarter of through, right in is on a very for flow the business step margin

three The I course to other looking that Andy last focused mention the over months team, really really transportation which have in another the at the thing they've costs of credit freight spiked are think so. I -- or mentioned, expenses addition That's up. would a mix inbound the on is, been

and charges, the threshold changes proximity thresholds things around looking at around charges actually delivery has is team and as the So like already implemented delivery announced well. modifying increasing

are margins it's going step a see might the the very in backwards. to stuff digital medium bit you very, doing to is going everything of We're a the in see near they're longer to they to in I to said, term, term, them And the control technology take that can right these to And help In So expected data in we're business. a longer rise. stores. as do. comfortable it. those the term, think Andy improve of investments analytics And lot that

Operator

Reuben of Garner from Our the next from line Benchmark. question

Reuben Garner

everybody. you, Thank

for of board. time than maybe that very to companies a you're strong, up What looking offices about how more Any mix? across what orders? being period at the So down they're of orders and seeing you the offices what and in growth future even just signs Knoll XX% Can Americas product closed I this into at think, looking catch set from kind work? a in we up is folks those their going talk with the

Andrea Owen

is to and turn want I Michael. over this Andy John it to Ruben,

their I think there's people a up for across how think but certainly and rethink how are the globe I news is bigger us there is pent working they're the thinking demand complete I that really about and office that about we're but of -- design space office think the what's in shared, A&D community really remote and that's seeing and hybrid the -- the to kind contributing community space. about

for just think we more it's of the pandemic. I So office the were out than

I think to how productively and to the demand. John, a out trying taking add to space work and really their that's what more at most would look you people are figure fueling that?

John Michael

Thanks, I'd different a Andy. Reuben say things. and few we're seeing

before. work to executives is, now has than space first their ever that understand I think C-level harder The

destination In terms to where and a back of and want connectivity collaboration. into people people come culture attracting and office the being for work to

that longer were sort terms spaces more workstation popular do companies lends pre-pandemic hesitating more of opposed a lifestyle lot the as or amenity were they I as core but type itself of to product any product In which to sort previously. maybe mix, ancillary of aren't think products

as a to X, And into going in or X. through X to faster work, omicron January, late about September was customers they I and lot think April were that be opposed June whether to we work, definitive became pace. once back surge at earnest much began it that got in sort easing of when more the

we have in MillerKnoll. things to of are So collective they have well spaces past. that environment think as portfolio the more the the think that to continue a will bodes do than different have continued we and the of going change I hybrid that now And given to

Reuben Garner

helpful. very Perfect,

you, I'm market, While I on integration, that's to with if least not when I not. I'm the -- but see think growing the very at numbers, order sure XX% have date that's the fully data up I

Andrea Owen

Outpacing the…

Reuben Garner

That's other what imagine of sustainable like maybe -- comparisons, don't. parts Knoll other there are business me, have mean, to parts how I it but is looks what I'd easy with that? -- is that especially your parts

So of is to of you what revenue outperforming are already kind it that Knoll's with your kind negative expectations is come? there still from any impacts do of Are is internally? Or seeing that? you -- is more dissynergies the allowing merger you this to

John Michael

it's know don't that our expectations. outperforming I

of think a are I there's couple favorable. that factors

demand MillerKnoll strong is to focus as you unify in that. increased returning would of I doing just the is started. sales MillerKnoll off network. tell office first people The well the with we're work organization taking to unified as That is just getting and on the dealer the and terms the work really

the level the positivity those to a made I we combinations. there energy think was powerful we're reference impact and just beginning Andy conference our to feel the incredible. sales that of in had about month ago

specifics, experience, going into dealer by and XXX week product we've training activation processes, to ordering et of to with installation, cetera. oriented us designers reinforce a dealer the that's three getting more second the products, where the got virtual are of be brands, up to weeks sellers Chicago, the than weeks We eight followed in

So next and the several MillerKnoll is that from months. perspective expect we building. momentum a continue to for see

Reuben Garner

And last appreciate Okay. for cost I gave third the one that me, Jeff, in the price color quarter. you

that mean Like only trying math, price of about basis want out front. plays to Does think not plus. I -- cost I still you XXX points the but that the assume up roughly you're up kind over next behind how just make on the for by -- some make that So year few that conceptually, quarters? how to my to last looking it? basis How model Or happen? we quarters And XXX know do over were before? at early it's do think we progression a quickly get 'XX? I change? the next we five just quarter how about points a step you where Are that out see of does margins but back will improvement to

Jeffrey Stutz

the we've that it's we're would There's yes, There's wanted we this, And a about it to changing, in and costs we moved feel enough ahead our prices real of Reuben, of pre-COVID We're basis. kind to through very FY mentioned dynamic exit -- time economy say we're filtering no in said to question. costs, the will as the combined and on had -- we a it's through in of prepared No, actions actions we accelerate. levels we a environment. in lot is brand 'XX be absent comments we Yes. fair happening would moves that's like necessary. first think are and good additional question. enough a if most that would I this recent aggressive confirm, take of on all, I price time these be some that margin the that the transportation we deem February would closely, and we Knoll that felt taken we but cover oil evaluating mid-February given recent

can that just to quarter of ramping crazy XXX pre-COVID FY I but or I know be -- would kind points would our we but expectation performance. a would basis at not absolutely the of me the I and the ahead to of mean, helps give see it 'XX margin commit to maybe a suffice don't that overall comp sound -- to levels performance. that I you. I color exit say, continually we doesn't know think I doesn't I best don't if that that's that point want you that being

Reuben Garner

last again, levels? part last part, exit what quarter to at say Jeff, exit, pre-COVID just clarify that that

Jeffrey Stutz

quarter Well, next is expected ramp year. to the over this after is that because quarter our belief

the exit would level expectation combined companies fiscal Our year that for exceeds two next at forma that would gross a combined. be combined the margin pro we margin

Operator

Craig-Hallum will from Capital. come line of next Fuhrman Our Alex the question from

Alex Fuhrman

options. kind we the same I retail Or business driving product like growth. you it Herman driving that stores home seating? corporate decor seating the Is that's that ask but are home days some of in of about been in to the slowed more Obviously, from your where that's dark that real relative retail little unpack to there of wanted has growth I be year-over-year showing channel. Can see Miller working think mentioned it is positive to from? a XXXX earlier you continues coming bit more assortment your growth.

we Just that on to you. But specific then big it's pretty kind seems just a business of quarter not segment And picture, so here. as billion track become about wondering, $X like quickly thinking I'm be Herman any Is of could mean for this should kind something XXX about stores. your years I this this three, how -- business? of be that wondering could or potentially branded more think XX% out? five Miller

wondering be open-ended if of signs you? just for see to where it's line growth kind even end started or of of Just the could if the you've

Andrea Owen

answer Alex, so is thank that. growth to from word using the the where questions. are -- These great we everywhere. coming for billion-dollar is The you much love

solid DWR. year. all Hay. surprising our I are seeing seeing categories in growth that So in past to last of say We're but us. to seating growth would that's not outperforming exception solid the one is We're

kind would I vast. incredibly growth the it the of what across productive, have slowdown January, that been to growth stores all labor opportunities it. all double We're upholstery, in ones have able happened in in board. But ship else you little happened to comping year HM the to really saying, this on bedroom that think seeing we in is been are shortages, seeing bit December, that Our everyone digits, a small in time in business It's we're spaces. of us, too. any in related things open happening over I dining is in were say that that that name a based have very slowing we the room, Omicron

to of a lot look and still gaming. we're the have forget pushing If that the amount categories you that in in new at in could don't be huge we we assortment to competitors, gain add million of our Gaming million is could which alone us. we $XXX year, business from is in And at big looking gaming $XX category a sweet a us. a next for nothing for ground spot

So brands of when optimistic are together, do we space. a about retail add what all do collective about brand you Herman as Miller that can of can all what the incredibly in our

Alex Fuhrman

think the about think building out more I source investment few that years? channel a are Great, as stores, that's And there the really really of retail for next big helpful. any could stores with you other brands just over then additional be you mean, more

Andrea Owen

course, collective them at brands. of elaborate a we we I look lens. Yes. And course, of can't have that all but with of great of

Operator

of the [Operator Yang Berenberg. come line Rudy next question from Instructions] will Our from

Rudy Yang

how your margins. forward, So now sounds obviously, much like versus further But is curious of oil going constraints to better. then your And pricing new of backlog just getting expecting actions comprised it orders are pricing benefit pricing? under supply chain

So just going moving better forward? that we'll to able in I you guess confidence improvements your talk to backlog be just what tangible aspects can see you give

Jeffrey Stutz

is This question. Rudy, Yes, good Jeff.

step backlog the kind little maybe -- of cost chatting little exceeds dated. past it as same bit of can might story those as before little started business back who you that for shocking is chain So a that say, in imagine, from We This the a typically, a for backlog we've a a bit the dated with has that got the the But that been a -- supply than billion. that's longer candidly, that's number. in $X longer have while, and a few been quarters. you report, saw I'll constraints us were

we So to February. you historically brands Remember, and to May of back May have of again November fiscal last price The percentage increases the the then price October, in a been implementing have year. kind days, in again Miller quarter to in initially and fourth ship Knoll of June we increases ground Herman and in and than that just then did maybe January, going in certainly that. on smaller we expect backlog would pre-COVID

increase have chunk semblance price price business there's a it's that our And been good a that orders because of some the in the -- a there's portion backlog mix, has backlog well. most of pricing. as XX% but good even semblance quite throughout strong of recent a So some of quarter, which increases course third the and it of was list contract has for that

have order we absolutely continues pacing mix continues number you a up it we blended as that order give at why but to this forward. that move is that's certainly -- continue ramp the don't the will to and -- hope I as a and So, good rate, that

Rudy Yang

orders color especially I there. think tough year-over-year, really No, know from appreciate were but orders last And Yes. declined pretty already a quarter. lot comps retail super but strong That's I given helpful. retail on talked the we I the sequentially

on So just that trends just the curious that seating permanently be there anything on any may reduction you else may that's changing in or have thoughts have that? drove

Jeffrey Stutz

Rudy. Yes,

So it's a question. good

of think mind. couple come things So to I a

First some of did center. weather-related have distribution all, quarter disruption our earlier in we that impacted the

alone. getting I is to we're are last -- continuing that factor don't there a tougher at think I Obviously, up perspective. to we want year certainly So -- I from seating run point the that to don't against a to comps task

Andrea Owen

general, to is in if add, had. sequentially Jeff, business a QX the look to consistent also, boost thing pretty in you the of year decline in last we out strip there is you one retail QX And from pandemic-related if kind

for So I would say sequential be that would readying quarter-to-quarter this expected business. us

So we're it. not by alarmed

Rudy Yang

doing groups Europe, for there And great. new then but from you I in early some with your were far I so group Okay, last think also can and me. in you any Arizona. just MillerKnoll share know it's one -- are results dealer Texas pilot testing

it are the were note of any versus there dealers? if curious any to international domestic comes different them? of between just differences major to your when So And if integration each results

Andrea Owen

world. I category a dealers, the upside just for really an are one is easier days product almost for pilots our going Rudy, and with them. lot We're more learning it's because it's well. international. But really from early international really that left It's all would this them is And say, over the

us think and our have complexity of June. formulate in the activation strategy will we our pilots the place dealer to helped really that there be undergoing we're Americas where in more and I So all have launching now

the internationally. board across up comes So

Operator

over turn remarks. the any I'm for Andy not showing any further questions closing in to call the queue. I'll

Andrea Owen

really thank and and for MillerKnoll our opportunities unique Well, creating exciting are stakeholders. great. all momentum fueling the and joining for new guys has that you us advantages growth competitive of Well,

us We continued your to look next appreciate we updating appreciate again care, Take So you your today. time forward interest with quarter. we everyone. and

Operator

Thank conference call. for today's concludes participating. This you

You Everyone, day. may great now a have disconnect.

MillerKnoll (MLKN) 30 Mar 222022 Q3 Earnings call transcript